Wednesday saw losses across the board for the indices as investors became more cautious. The Russell took the biggest hit with a loss of -0.72% and it was followed by the S&P with drop of -0.65%. The Nasdaq fell -0.46% and the Dow suffered the smallest loss at -0.42%.
Looking at the sectors, eight of the 10 fell on Wednesday. The industrial sector suffered the worst loss and by a wide margin. The sector fell 2.14% on the day. The energy sector dropped 1.14% and it was the only other sector to decline more than one percent.
[hana-code-insert name=’adsense-article’ /]The utilities sector gained 0.38% on the day and that was good enough for the top performance award.The healthcare sector moved up a whopping 0.02% and it was the only other sector in the black on Wednesday.
My scans turned in another strongly negative result last night with 80 names on the bearish list and four on the bullish list.
The barometer fell to -45.6 from -21 after these figures were added in to the equation.
After going back and forth between bullish and bearish trade ideas for several days, now I coming at you with a third straight bearish idea today.
Guess? (NYSE: GES) appeared on the bearish list and the fundamentals are less than attractive. The EPS rating is a paltry 29 and the SMR rating is a C. The company saw earnings decline by 9% in the most recent quarterly report.
The chart shows a downward sloped trend channel forming off the March high. That high connects with the May high and now the July high to form the upper rail. The lower rail connects the March, April, and June lows. The daily stochastic readings are exhibiting a similar pattern to the one we saw in March and they just saw a bearish crossover.
Buy to open the September 17-strike puts on GES at $1.80 or better. These options expire on September 20. In order for these options to double the stock will need to reach $13.40.The lower rail of the channel should be well below this level in a few weeks. I suggest a target gain of 100% with a stop at $17.10.
— Rick Pendergraft
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